Good. Well, I think everyone is here, so let's get going. Welcome to the 2019 preliminary results for Money Supermarket Group. I am Mark Lewis, the CEO, and we're going to follow the usual running order this morning. So in a minute, Silla will take over, run you through the financial delivery for the year and our update on our markets, and then I will come back and talk about progress on our strategic delivery.
After that, we'll take some Q and A. Coming to the chase, it has been a year of delivery for the Reinvent strategy. For our customers, once again, we have helped households save over £2,000,000,000 investors, we delivered the planned return to profit growth with revenue up 9% and EBITDA up 7%, while also redistributing £100,000,000 in cash throughout the year. We delivered this despite the headwinds in the market for price comparison. The headwind that comes from the shift to mobile continued in 2019 and if anything grew a little stronger in the year.
Our successful work to increase conversion rates and optimize the customer experience, combined with our disciplined approach to marketing, is combating these trends and underpinning the return to profit growth. With regard to new market growth, we are pleased with the work to drive increased retention through delivering a more proactive and personalized Money Supermarket experience. We now have over 600,000 customers on Money Supermarket having their bills proactively monitored. These customers visit us more frequently, search for more products, save more money and are worth more for the business. This gives us confidence to keep pushing with this work, and we will support the brand with increased commitment in 2020.
Similarly, we think that we can bring a personalized and automated service to money saving expert users. This will start in Energy, where we will update the money saving expert Cheap Energy Club to add what we believe will be The UK's most trusted auto switching service in the 2020. So over to Silla for a summary of the financial results.
So thanks, Mark, and, morning, everyone. Before I start, just a reminder that in these numbers, we've adjusted the 2018 comparative for IFRS 16, so you can get a good like for like sense of performance. So looking at the financial highlights, and as Mark said, we had a good year. Top line growth of 9% or 5% if we exclude DecisionTech. EBITDA grew slightly behind revenue, which reflected gross margin pressures, offset with some good cost control.
Our reported EPS grew 11%, so ahead of that EBITDA growth, which reflected both lower adjusting items and a lower effective tax rate. We continued to leverage our technology platform and our reinvestment rate fell two percentage points to 9%. Cash flow was very strong again, over £110,000,000 reflecting the dynamics of our marketplace model. And we're pleased to have announced an increase in our full year dividend of 6%, reflecting our progressive dividend policy. As you would have seen from the statement this morning, our users remain engaged.
We continue to have a strong group NPS of 74. Our active users grew slightly to 13,100,000, and we're proud to have helped households save £2,000,000,000 So before I go into more detail on our performance, I just wanted to take a step back and remind ourselves of the markets in which we operate, which we still expect to grow 4% to 5% over the coming years. So let's take a look at insurance first, which, as you know, is the largest of our markets. It's still a growing market, albeit at high rates and channels other than car. And just a reminder that car, for us, is less than 50% of our insurance revenue.
Car itself is also still in growth. It is the most highly penetrated from a switching perspective, but total policies are still growing. And that's due to both an increase in the car park and people continuing to drive later in their lives. There is still the potential in car to grow switching through increasing sorry, reducing the frequency between switching. But if you look at the slide, and here I focus on the three largest channels in insurance.
So that's car, home and travel. There are 68,000,000 policies that are written, a year in those channels. Clearly, as you know, it's a market where the end product is time limited, where you get an annual renewal notice, where we and our competitors have invested for a number of years in marketing, and where a consumer is often required to hold the product. So it's maybe no surprise then that of those 68,000,000 policies, just over a third are already switched and many, 27%, are switched using a price comparison website. So, let's just look at what the drivers are for growth.
These will vary a little by type of insurance, but I'd highlight three main things. Firstly, increasing switching frequency, particularly in car secondly, driving penetration within other channels and finally, making sure that you deliver a good breadth of panel so that you can fulfill different consumers' needs and making sure you do so at a good price point. So an example here might be making sure that your panel can cover pre existing medical conditions in travel insurance. So what have we done, or what are we doing? Well, our approach to insurance is to make sure that we've got effective personalized switching prompts when policies are coming up for renewal.
We've also looked for prompts that are going to help make our brands more front of mind and allow us to retain customers. What you've seen here is our first steps. There are MOT and car tax reminders. We have and continue to develop broad panels of providers. As you'll have seen from our website, we're particularly focused on our price competitiveness within car.
So if you look at money and money splits into two broad categories, banking and borrowing. Over 75% of our revenue comes from that borrowing side. So think credit products, think cards and loans. In general, and I'm talking at a market level, money is a more promotional market. Rates at a macro level will will drive whether banking or borrowing is in the ascendancy.
And at the customer level, promotions also act as a trigger into a switch. So rates and deals will drive search volumes. There's no regular call to action in that vertical, as you know. You know, you kind of don't get that sticker shock that you might get when you open your annual insurance renewal. And confidence is also a key element of the decision making process.
And so consumers often still take the product from their own high street bank. And you see a lot of that reflected in the statistics in the slide. So here, we're looking at credit cards and loans. And there are 44,000,000 in existence. Only about a quarter of the market is switched and only 7% are switched by a price comparison website.
So there's lots of room to drive penetration here. So again, let's have a look at those kinds of drivers of growth. Again, I'm going call out three things. There's a rule of three. You'll see the theme here.
Firstly, building certainty for customers that what they see is what they get. Secondly, making sure that you've got the promotional products that you need in order to capture the customer attention in the first place. And finally, making sure that you're creating engagement trigger points. So again, looking at what we're doing to address those three things. Well, our eligibility tools do give consumers the confidence to search, knowing that their score isn't going to be impacted, but importantly, that they're going to be presented with products and rates that they, as an individual, are likely to get.
Second, we also are very lucky to have the power of money saving expert within the group. And as you know, it's a very, very highly trusted brand and one that can drive engagement through editorial recommendations. And finally, we've looked to create prompts that can become engagement levers. So you've seen the launch of Credit Monitor, as the first step here towards driving more frequent interaction, using those changes in the credit score to drive engagement. And we've recently added a fraud alert function here too.
So let's look finally at home services. These are nicely growing markets, both in energy and home communication. There's significant headroom to drive higher switching penetration in channels such as broadband. But today, I'm going to focus on energy, which for us is over 75% of revenue in that vertical. It is the largest market, so we're out 52,000,000 energy accounts.
And here, just remember that gas and electricity at the same account would count as two accounts in those numbers. About 20% of accounts are switched in the year, and that's online and offline, but it's only including provider switches. Of those, about half are switched via a price comparison website. So again, the opportunity is still to increase switching penetration. As you know though, this has traditionally been a very low engagement category and lacks the call to action to drive that sort of switching consideration.
So growing here is really a twofold challenge. It's firstly about engaging customers in the first place, overcoming that consumer inertia. And then it's also making sure that once the customer is at the top of the funnel, you make sure that they progress through that funnel. So that's often about actually helping them understand that it's easier to take that switch than they may believe. Through 2019, we've seen the price cap and the media reporting of it acting as a core for action in energy.
And Money Saving Experts' editorial power has helped in engaging their users. We've also, as you know and as we've shared before, we've had some really good wins in the last couple of years in improving the conversion of our customers as they go through the journeys. But moving forward, and Mark's going to come on to talk to you about this in more detail, our new monitoring and auto switch proposition is going to help us grow further within the vertical. So that's the market. Let's kind of go back to our performance.
And as I've already said, a good year of growth, with revenue growing 9% as the headline level, or 5% if we exclude Decision Tech. We had solid performance in Insurance. And both in Car and Home, we had good growth in the first half, but those headwinds from Natural Search in the second half did act to temper full year growth. Monty performance was disappointing at negative 2%. And the lack of promotional product that we discussed at the interims continued into the second half.
We also saw a slowdown in the growth of searches for credit products towards the end of the year. We have strong energy switching throughout the year. And as you know, there were a number of reasons for that. We flagged before that our commercial teams did a fantastic job securing great deals through the year. The press coverage of the price cap did help to generate engagement.
And the power of our brands and the journey improvements that we've made enabled us to capitalize on those opportunities. We finished the year with really good growth of 39% for Home Services. DecisionTech also proved a good acquisition and delivered pleasing growth for us throughout the year. Moving on now to the income statement and looking at the shape of the P and L. As we've seen, adjusted EBITDA grew 7% on the year, so lower than that top line growth, which was really reflecting a reduction in the gross margin rate.
We delivered a gross margin of 69%. That was over two percentage points lower than in 2018. And that reduction was driven by three kind of broad main things. So firstly, the consolidation of Decision Tech, where, as you know, their B2B margins are lower than the B2C margins of the rest of the group. The trends for customers to transition to mobile continue to put pressure on margin, and that continued to cost us in the region of 100 basis points in 2019.
And finally, as we touched on with our Q3 trading statement, we did experience some volatility rankings during the second half, and that meant that we mixed out of higher margin traffic sources. Those natural search changes impacted us particularly in insurance, where prior to the summer, we'd always enjoyed consistently high positions on the search page. Organic search has been a really key and core strength of our team over recent years, and we still remain very confident in our skills and capabilities here. And whilst I can't tell you that we're now back to those consistently higher positions that we previously enjoyed, we have seen some improvement in 2020. They're continuing down through the P and L, and depreciation and amortization was in line with plans.
And the year on year increase reflects some large technology assets that went live late in 2018. We had $5,000,000 of adjusting items in the year, 2,000,000 relating to the acquisition the amortization of acquisition intangibles and the balance relating to strategy and reorganization costs. As we move into 2020, I expect that line will only include the ongoing amortization of acquisition intangibles. The reduction year on year though in adjusting items and a lower effective tax rate drove an increase in net profit ahead of EBITDA growth at plus 11%. Looking at costs, and these grew 11%, or again 5% if we exclude Decision Tech.
That increase was driven by two key main things: marketing, as you can see, and depreciation and amortization, which I've already explained. So let's take a look at those marketing costs, which grew 15% on the year. In online spend, our approach to digital marketing has remained unchanged. So that, as you know, is that we'll bid up to breakeven on our first transaction. TV and Radio remained broadly flat year on year despite the relaunch of the brand.
And as we discussed with the interim, that increase in the other category here is driven by two things: the inclusion of the full year of DT costs and the strong energy performance, which drove an associated increase in cash back costs to customers who switched using Cheap Energy Club. The Marketing margin, therefore, reflects the gross margin trend that I've already discussed, falling to 61% from 63% in 2018. From a tech perspective, our costs reduced year on year, both in absolute terms and as a percentage of revenue, as we continued to leverage our group platform. That total tech spend also benefited from our teams now being insourced rather than us having to pay an outsourced margin. In other CapEx, we spent £2,000,000 on our new tech hub in Manchester, and we expect to spend slightly less than this in 2020 on the refurbishment of our UDO office.
And that's in addition to the tech CapEx of 2020 of about £10,000,000 As we've seen, our cash flow generation remained strong during the year, and we delivered 114,000,000 of operating cash. We did have a working capital outflow this year of £5,000,000 and that was driven mainly by an increase in receivables. That in turn reflected a mix into channels and providers with longer working capital cycles. Our strong cash flow continued, though, to enable us to return significant funds to shareholders. That was £100,000,000 in the year.
And we finished the year with net cash of £24,000,000 Looking now at our capital allocation framework. And as you know, we continue to enjoy strong cash generation and we expect that to continue into 2020 and beyond. Our framework of how we deploy that cash remains unchanged. So as you know, funding organic growth remains our top priority. Then comes our commitment to a progressive ordinary dividend, so growing alongside earnings.
After that, we'll look to M and A to support and accelerate our strategy. And finally, as ever, we don't need to retain large cash balances, and so we remain committed to returning excess cash to shareholders. And finally, I just wanted to give you a bit more color on guidance for the year ahead. As we've seen, we remain confident in meeting full year market expectations for the year. You'll have seen in the statement that we flagged that year to date, so the first six weeks, trading dynamics have improved compared with the exit rate of 2019.
As we've also flagged before, we expect the car insurance market to return to premium inflation this year, and we expect that money will return to growth during 2020. Mark will come on to this, but the initial experience of our Monitor customers is looking positive, and so we've chosen to spend a further £5,000,000 in '20 on brand in order to support that initiative. I do expect performance to be second half weighted, which reflects broader market dynamics, prior year comparatives and the timing of some initiatives. And finally, just to watch out and a reminder, this is the year that the HMRC payment calendar changes. So we'll be making six installments of Corporation Tax in the year rather than four normally.
So do remember to model back outflow into your model. Thank you very much, and I'll hand you back to Mark.
Brilliant. Thank you, Silla. Great. All right. Well, look, as Silla's clearly laid out, this is a business with very strong, fundamentals, whether that's our scale, it's our brand position in markets with structural growth, whether that's our highly efficient marketplace model or the strong cash generation.
Let me now take a few minutes to walk us through the delivery against our strategic goals. Recap that in our Reinvent strategy, we have two sides. On the left, Riaxcellerate Core Growth, our work enhancing the existing comparison model with a real focus on customer experience optimization. On the right, new market growth, areas where we are positioning the group to outperform the market through changes to the proposition and extending the range of services we offer. Looking first at the left hand side, reaccelerating core growth.
It has been a strong year for both our major consumer brands. As you know, we rebranded Money Supermarket around this time last year with positive results. Look out for new TV advertising to come soon. The brand's Net Promoter Score has moved forward in the year. On the provider side, I'm pleased with the strength of the panel, which we believe is the best in the business across multiple categories.
Money Saving had a standout year for its users with record numbers of visitors and tip sign ups. Once again, the strength of this truly consumer championing editorial content underlined Money Saving Expert as the go to place for The UK public to understand the things that impact their finances. Record traffic around the PPI claim deadline and of course, fantastic job of helping millions of users navigate the introduction of price caps in energy. But as you know, at the bottom there, over the last couple of years, we have added a new capability, customer experience optimization. It is now business as usual and it is working across the brands and continues to work for us.
As you know, we got our actual conversion rates as commercially sensitive. I do want to make sure you all understand the dynamics of how critical this work is to combat the headwinds in the market. Since we started this work, we have increased conversion rates. The chart here actually shows our conversion rates in the major insurance categories. And as you can see, the conversion rates have increased on desktop.
More importantly, bottom left, they have also increased on mobile. This is really good work. The headwind comes from the fact that the conversion rates on mobile are lower than those on desktop. And as you know, this is true in just about all markets, be that retail, travel or indeed comparison. So as we see the mix shift towards mobile, the net effect is a suppression of the gains we're delivering, compounded by an increased prominence of paid search over search engine optimization on mobile.
Of course, if we hadn't built this capability, the impact on the business would be more challenging. Mobile migration continues. And in 2019, it actually accelerated a little. We have previously discussed about a one percentage point margin headwind from this, and I suspect that continues into 2020. Now let's have a look at new market growth.
In a minute, I'm going to spend a little bit of time talking about our work on personalization. But first, let me just give some quick updates on our progress in B2B and in mortgages. It's been an encouraging first full year for our B2B decision business, DecisionTech. They have posted double digit growth, showing strength in their historical core of home communications. In 2019, we added energy switching to the DecisionTech commercial offering using our group technology stack.
This has resulted in a rapid market entry with what we believe to be a leading offer. DecisionTech has now secured six commercial partnerships in energy. On mortgages, we continue our work to digitize the mortgage market. We've added eligibility factors to the Podium platform, resulting in higher converting leads for our broker partners. We have direct integrations live with four of the market's leading lenders offering product transfer rates for existing mortgage customers.
And we'll continue to deepen these direct integrations through 2020. Earlier this month, we expanded our integration with Nationwide to offer customers an instant online decision in principle on their mortgage without leaving the money supermarket site, a first for any UK comparison site. Right, let's talk about personalization. This is one of the key initiatives for the group. Why?
Because it speaks to the core comparison proposition, has the potential to fundamentally enhance the economics of the business. We all know what a positive economic model we've built with price comparison, that it provides real value for the user, that it matches risk profiles to the providers and that it generates efficient returns for the business. But let's face it, we all know that it also has an Achilles' heel, that customer experience doesn't naturally prompt people to repeat, with a frequency. And as such, we choose to invest significantly in customer acquisition costs. Put this another way, once you have sorted out your car insurance, you actively don't want to think about it for another year.
And so we have to spend money to remind and prompt you to come back to us when you do. Now we do this well, but we think we can do it better. So what have we been doing and how is it going? Well, look, following the brand relaunch of Money Supermarket, we have now moved over 600,000 customers to monitored services. What does it mean?
It means that we are being proactive on their behalf. They can now have a personalized homepage that summarizes the status of their main bills and credit score all in one place. It means they have their credit score for free in their Money Supermarket account, and we will alert them with updates and recommendations. It means we will monitor their energy tariff, check it each month and alert them to the next best deal when we find it. And it means we will automatically requote their car insurance and let them know when their tax and MOT are due.
Let me be really clear, we do this because they are very helpful services for customer, but explicitly so that we give them a reason to visit more frequently than they would otherwise would. What does this look like for the customer? Well, it changes their relationship with Money Supermarket, moving from being the place they turn to if they get an insurance renewal that they don't like to being a trusted brand that is being personalized and proactive on their behalf, helping them to stay on top of their bills across multiple categories, allowing them to get money calm. Remember, we can do this because of our unique position as a diversified comparison business, running multiple categories of our own proprietary technology stack and with a single view of the customer. This shift has the potential to enhance the underlying economics of price comparison.
Let's have a look at what we are finding. We've been scaling our monitored services through twenty nineteen and the impact on customer value is significant. In short, customers of monitored services return more, save more money on their bills and have higher value to the business. What's on the chart? Well, chart shows directionally accurate, but you won't be surprised to hear commercially sanitized data for Credit Monitor customers compared to a statistically representative sample cohort of customers.
First thing to note on the left is that Monitor customers visit more and run more inquiries for products. This is obviously a good thing. Significantly though, bottomless, they visit more across the range of categories we offer with increased cross sell. The economics of Monitor customers are also different. When they visit us, they tend to come through paid search less than similar customers, which is obviously favorable.
In return, we spend a little more in the cost of servicing their inquiries, for example, running the soft credit searches or providing the credit score. But when you add all this up, the increased number of visits and cross sell wins out, and these customers are already demonstrating higher value to the group. So our plans in 2020 are clear, seeking to increase the number of customers using our monitored services and to support the Money Supermarket brand with increased marketing activity. So that covers Money Supermarket. And I want to spend a couple of minutes talking about Money Saving Remember, this brand is a true consumer champion with independent editorial content helping users navigate their finances.
I mentioned earlier that 2019 was a record year for Money Saving Expert, and indeed just last week, you might have noticed it was voted The UK's most recommended brand in the independent YouGov survey that tracks the Net Promoter Score of all UK brands. Money Saving Expert is a big player in energy switching, offering significant savings for users. It offers a full market comparison, which means it tries to show the savings available from all 60 also of the providers in the market. The breadth of panel results leads to market leading savings. Currently, 130 tariffs on Money Saving Expert cheaper than the off gen price cap with savings running at around GBP $3.50 to GBP $3.70 for a typical user.
So when it comes to working out how best to approach an auto switching service worthy of the Money Saving Expert brand, we knew we had to build something that delivers real value for users and match the savings that they could achieve if they wanted to do it themselves. And this is what has driven us to actually sit out what I would call the first wave of auto switching services until we could be confident that we could build one that was worthy of the Money Saving Expert brand. The reality is that AutoSwitch is inherently compelling for users, but it is not straightforward. In order to make it work as a marketplace, there are a number of challenges that need to be overcome. We understand these because we have years of user insight, years of behavioral data and long standing relationships with the energy providers.
We think it's important that users get the best price tariff for them. The myth is that people just want the cheapest, but the reality is most users don't actually choose the lowest price tariff. They choose the cheapest tariff that meets their personal preferences for factors such as service, brand reputation, green energy and so on. Users like the idea of convenience, but they don't want to lose control of not knowing who their NG is with, of being switched too frequently or of being hit by surprise direct debits. For the providers, it is even more stark.
Done badly, auto switching can remove the ability for providers to differentiate on anything but price. Too bad, you might say, but the reality is the combination of short duration tariffs with limited ability to differentiate is fundamentally challenging to provider economics. And if you don't have the right providers on your panel, then you can't offer the right value to the user, and this is why we have not been excited or felt able to endorse early auto switching services. But we think we have found a way to deliver auto switching that can be trusted by users and work for providers alike. It will launch in the first half.
It is under wraps until then, but I've asked Martin Lewis, the founder of Money Saving Expert, to talk you through the proposition and our views on the market. If you play the video.
When I'm on my TV roadshows and I'm talking about energy, people tell me they're scared to do a comparison. So I bring them over to the computer. I say, I'll help you do it, and I'm there, and I ask them to fill in their details. No problem. That bit's easy.
That's not what they mean by scared to do a comparison. The bit that really panics them is when they get the results, and there's a long list of providers that they've never heard of, some with no customer service rating, some with limited customer service rating, and they're made to make a choice, and a choice that they don't really understand. And at that point, they often look at me and go, can't you just do it for me? So, of course, the premise of auto switching is one that's very attractive to people, but it's also one that so far I've not been willing to put my name or money saving expert's name to because I don't believe the service lives up to what people really want. There are two main problems with the offerings out there.
The first of all, well, there aren't enough providers, so you're not gonna get a really good tariff. We need most of the market to be engaged and allowing auto switch to happen. And second, there's no choice. People aren't one homogenous set. When I'm talking to them about energy, some really care about service.
Some care about whether it's green. Some care about whether it's service or green. Someone to fix. Someone to name that they've heard of, and, of course, all care about price. So, actually, different people will choose different providers from the same choice.
So when I was thinking about what money saving experts auto switch should be, for me, it wasn't simply just porting people to a new cheap provider each time because that takes the choice away from them. It had to involve a comparison. Now the service is auto switch, but the underlying tech is auto compare and switch. We will, first of all, find out from people what they want, what are your preferences, what matters to you, how much is price, green, fix, name you know, service, how much do all of those matter to you. And then once we know, instead of giving you a huge choice that you then have to go through, we're gonna say, based on what you've told us, that is your best tariff.
Then you can choose to switch to it, and because we now understand what it is the individual wants, then each year, we can continue to switch them to their best tariff, not some idealized tariff, but a personalized choice as if they've done the comparison themselves. Some people might still like to compare every month if they choose to do it. They can keep doing that, but those who just want an easy life, but their exact choice will be able to use MSC's new auto switch service, and there ain't anything else like it on the market. We've been developing this for a long time. I'm really excited about it.
I've been all over the team on it, and it's gonna be fantastic.
Very good. Alright. Let me try and, summarize the key elements of our auto switch proposition. For the user, it will offer tariffs from the existing provider panel the same deals as if you did it yourself. For the provider, they will have the ability to differentiate on multiple factors to provide sustainable economics.
Of course, we're able to leverage our group capabilities in our move into auto switching. Our existing technology, the existing commercial relationships and most importantly with money saving expert, we have the trust and existing communication channels to launch the proposition. So let me wrap up. We are pleased with delivery in 2019. We've delivered the planned return to profit growth and we're making exciting progress on our strategic delivery.
We're operating in growing markets, but there are also headwinds in the economics of core comparison, driven by the role of paid search and the shift to mobile. Our optimization gains are combating these headwinds. We think we are well placed to move the price comparison experience and economics forward with agenda. Our work to date on Money Supermarket has shown that we can increase customer retention and we are excited to increase the number of customers using our monitored services in 2020. Having deliberately sat out the first round of experimentation, about to bring auto switching to money saving experts in a way that meets users' needs and provides sustainable economics for providers.
It's going be an exciting year. Trading is off to a good start, and I'm happy to confirm the Board's confidence in meeting our full year expectations. Finally, before we open up for Q and A, I wanted to make a couple of comments about my indication to Robin of my wish to discuss CEO transition. I think Money Supermarket Group is a fantastic business. As we've shown today, it is delivering on its strategy.
It's my absolute honor to lead a group with such a compelling mix of strong purpose and strong business model. As we progress through the third year of the Reinvent strategy, I found it the right time to consider my position. The group is in great shape. I'm very proud of the team we have built, what we have delivered over the last few years. Having reset the business at the start of 2018, we have worked hard to transform the group, having built new capabilities and adding new revenue streams.
The plans for 2020 are set, The team is well placed to deliver them, and we are confident in our growth expectations. I will work with Robin and the Board to ensure that process is managed in an orderly fashion, but for now, it is very much business as usual. As for my next steps, well, there are a range of things I want to achieve in my career, but today is about this business. So I will politely defer that conversation to a later date. And with that, let me, open up the floor for questions.
Thank you very much.
Hi there. Joe Barnett Lam from Credit Suisse. Three for me to start with, please. Firstly, with regards to home services, looking at q one eighteen, I think a lot of the strength in home services came from the back end of the quarter. Given the comment that you've made about it it being flat year to date, could you help us understand the shape of that quarter?
Secondly, with regards the transition to to mobile and the impact that's having on on gross margin, can you help us understand how far through that transition we are and how much longer you think it will go on for? Mark obviously touched on it continuing into 2020. And then thirdly, can you quantify the SEO headwind and how long you expect that to continue?
Of course. I'd like to remind you that you didn't have any questions before we sat down. But, Sila, why don't you do the first one? And, I'll do the second, and then maybe you go back and do the the SEM.
So just for the transcript, you referred to Q118. I think Q119 for home services. Yep. It's only trying to chipped me up all the time, Joe. It just flies by.
And I'm not going to give you six week forecast, but just to remind everybody of what we saw, in first quarter last year. So we saw really stellar growth in terms of the numbers that we printed. A reminder of the shape to that though, so clearly, we had the announcement of the first change in the price cap sort of midway through that quarter. And that and the sort of press surrounding that, combined with, some good tariffs and some exclusives that we had, does mean did mean that the performance in that quarter was sort of second half weighted. We've said within the outlook that, we've, so far year to date, performed flat
You know, we're we're comfortable with our, growth expectations across the year, but I'm not going to give you a six weekly view for the second half of Q1, Jeff.
Thank you very much. Transition to mobile. So I I I think we've previously said that we felt as though we were over halfway through on this, and it is true, that the majority of visits to the site now happen on mobile devices. Remember, is growing, tablet is now relatively small in the mix and mobile is where the growth is. But that movement did continue in 2019.
And so as I said the summary, it didn't slow down in 2019. Actually, the pace with which the migration is happening stepped up a little bit in 2019. We don't know if it will continue at that level or step up further in 2020. We're guiding that we think there's about a one percentage point headwind that comes from it this year.
Then looking at SEO for last year, so as you know, most of that impacted us within the insurance vertical, so that's what we're talking about. I'm not going to precisely quantify it, but I'd point you towards two things in terms of what we've said. So when I was I'm talking about the sort of shape of the gross margin change year on year, and we sort of said, you know, one percentage point DT, one percentage point shift to mobile and the largest element of the balance was the transition in terms of, traffic mix away from SEO. And if you go back and look at what we said in Q2 last year, so we just printed plus four from an insurance vertical and we talked about good momentum. So I think, you know, you can infer from that what we were hoping we might be delivering in q three, and then we reported actually, plus three for the quarter.
So I think both of those things are sort of relevant touch points you.
Andrew.
Thanks. It's Andrew from Barclays. I've got, three as well. First one, on these, the monitored services, the 600,000 number, can you give us a sense of that plateauing or accelerating? I'm just trying to understand, is that kind of early adopters who really care about switching?
Or is this now becoming mass market and you think that can become a really big number? Second question, back to the auto switching. Anything you can share a bit more about the economics from a provider perspective in terms of how you're thinking about it? I guess the release talks about a CPA type model. Is that kind of comparable to a normal switch?
And I guess it's gonna increase churn. So how how how are the providers thinking about that? And then third one is maybe one for Robin, just on on the search. Anything else you can share in terms of kind of timeline, internal, external? Any other color you could share would be great.
Thanks.
Okay. I'm going to actually tackle the third one. We have nothing more share today on that, on time line. I know Robin will be around, after the session, but there's nothing more we have to say on that today. And remember, I've tried to address, I am here, no data set and it is business as usual.
On if you're okay, I'll take the monitoring and the auto switch question. So on monitoring, we've announced over 600,000 customers. We're pleased with that scaling number in 2019. Obviously, we want it to be a bigger number, and we are confident in our ability to grow the number of monitored customers. Your question is, are they early adopters and so on?
We have tried to be as statistically robust as we can be in our analysis. So when we're at risk of going down a statistical rabbit hole, which I know you will love, but the, the cohort so which so will I. Right? The, the cohort that we have shown in the presentation, is deliberately determined to strip out such factors as you might be alluding to. So exciting times.
And remember, it's not just Credit Monitor, we also have Energy Monitor and Car Monitor in the mix as well. As for auto switching, the economics for the provider is one of the key elements here. Let's not forget, the user side of this is very critical as well in that people want the right tariff for them depending on their preferences. And actually, they need the switches to be managed very, very smoothly so they don't get surprised by direct debits which come out of the mouth of nowhere. But the provider side is where the economics is really interesting, and where we have worked very closely with the providers in order to build the service that meets both the needs of both sides of the marketplace.
I think as we've said under the slide, we're doing this under the existing commercial model that we have with providers. And the really critical piece in there is actually allowing the marketplace to work in a way that meets both sides by creating a service which allows the providers to differentiate on the things which they think that they are best at, which is actually also what the users want as well. So as Martin alluded to in the video, understanding the preferences of users around things like green energy or service and allowing the providers to differentiate, and that's what underpins, the sustainability Any questions? I think we have, we'll go here, then we'll go. Hi.
It's Natasha Brilliant from Citi. Three questions as well, please. Firstly, just on the insurance, just coming back to the algorithms. So instead, I think you're almost back to your previous sort of levels in terms of the search rankings. Are you confident you can get back to those levels and how long it will take?
And then what's the risk around further algorithm changes and and this having a sort of ongoing impact as we go forward? Secondly, just on the FCA review on insurance, keen to get your thoughts on how you think that might drive both searches and also conversions, if you've got any thoughts around that. And then finally, just on money, just to be clear, when you talk about growth in 2020, is that on an aggregate basis for the full year, or is that returning to a positive rate by the end of the year?
Do you want to start on SEO? Then I might just build on it.
I I will I will start. I didn't quite say what you've repeated back to me. I hope I didn't. What I said is, we haven't returned to the kind of consistently high positions that we enjoyed in 2018 and the 2019, but we have seen some improvement as we go into 2020. And that's it's an important difference to to land.
Do you want to talk about further algorithm changes?
Yeah. Why don't I talk about that? Algorithm changes on search engines are, you know, a part of life in this industry and and any other industry. The the key question I think is as a business is do you have the skills and the capability to identify them, and adapt and so on? I think, you know, we have a very good record in that regard.
That said, without doubt, and there's plenty of commentary on this across multiple industries, the algorithm changes that we saw in the around Q3 last year looked a little bit different from ones that we've previously seen in that they didn't settle as quickly. In fact, they've created a little bit more volatility than we had seen in previous algorithms. I think there's a very consistent commentary around that across the industry now. So our position is exactly as Sindler has described. We're good at this stuff.
So I do FCA, do mine? FCA, so we are waiting on the final report. It's due in Q1. I haven't seen if it's come out this morning, but I'm assuming that it hasn't. Our engagement on it so far has been very positive.
And remember, the regulators have declared very strong positions that comparison is a force for good and does help users deliver value. We're anticipating, that any supply side remedies will fall on protecting the very vulnerable, that's obviously a good thing. But really, all the mood news we continue to hear is encouraging signs around demand side remedies, making it easier to switch, easier to, force accounts over from one provider to another. And that does seem to be a pretty consistent trend now from the regulator. So that's our understanding of what will come.
I think the one build I'd add on that, and it's because it's often sort of forgotten when we're talking about it, is remember within insurance in particular, what can frequently drive a switch is when you've had a risk changing event. And clearly, the market study isn't thinking about that. Just in terms of money, the guidance that we've given is that it will return to growth during 2020. So I'm not going to add anything, else on that. And as we sort of said, in the first six weeks, we have seen some improvements on performance.
So take that as we knew we've had some improvement versus, where we actually got.
Thank you. I think you had a question.
Thank you. Brady from Stifel. Just coming back to the partnerships, the six, partnerships that you have announced in energy with Yalton and several others. Are they actually generating any leads? Or is it sort of just on the marketing stage at the moment?
Well, decision sectors, we said overall grew, double digit. We're actually pleased with our penetration into that market now. I think at this time last year, we had announced the first, so that's the time line for this going. But now we do have a number of partners that are generating interesting number of leads. What we're finding is that our proposition remember, the energy proposition that PhysicianTech can now take into the market is built on our group technology and commercial relationship, which means that it's a really strong proposition in the market, so we're pleased with that progress.
I don't know if there's any more breakdown that we want to share at this stage. I don't think we do.
Thank you. And and and just one more. Sorry. I just struggled slightly to read between the lines on the business model of the auto switching. Does that mean you're not going to be doing the kind of ten year model that your friends over at GoCompare are offering?
Is it gonna be more of an annual proposition?
We're building it under our existing model. Okay. We think it can be done under the existing model.
So we should be thinking of kind of a minimum switching period of annual rather than maybe every three monthly or something like that?
I I would want you to take that away at this stage. Yeah.
And and your key point is that we get paid when somebody does a, double switch rather than it being a tenure. Thank
you. Yeah. It's a really important thank you for raising. It's a very important point that people understand. We don't need to change the model.
We have to do it. I think there's a question on the webcast.
We have a couple of questions from the webcast from Edward James. Firstly, the launch of auto switching comes as a surprise given you talked down the proposition in both the full year 2018 and half year 2019 results and said the consumer is not ready for it. What's changed in that view? And why has there been no incremental marketing tech or OpEx cost guided for the launch of this product? And also, what's the revenue expectations for 2020 and 2021?
And also another question, consensus is looking for 7% to 8% EBITDA growth. That's a step up from 2019 on an underlying basis or ex the impact of M and A. With growth sorry, with sales growth unlikely to be as high as that and marketing margin likely to fall again in 2020? Is this growth driven by reduction or flat OpEx base? Is this sustainable beyond 2020?
Okay. Why don't you do the first one and I'll do the second one?
I'm so glad you said that. Auto switching, is it a surprise? Well, I hope it's not a surprise. I think we've been incredibly consistent, actually. And what I've said today is that we have deliberately set out the first round of auto switch services, because we haven't seen them work as a marketplace.
And we haven't felt that we could endorse, the models that we've seen in the marketplace. We are taking to, the market in the first half though an auto switching service, which is deliberately designed to meet and overcome meet the needs of users and overcome their concerns and meet the needs of providers and overcome their concerns. For the consumer, that means allowing them to choose, what matters to them most in their own choices. It means managing their switches so they don't lose control. For the provider, that means creating a marketplace where they can differentiate on multiple factors, not just on price.
It is just a fact that the combination of a short duration tariff with only differentiation on price is really challenging to provider economics. And we have worked with our providers to build an auto switching marketplace that meets both needs. So we're super, super excited about that. Question was why are we not increasing the investments in order to do that, which is a fantastic opportunity to me to remind us of our strength of our capabilities. We have a group proprietary energy stack, services, which Money Supermarket, services Money Saving Expert, services our decision set proposition and will service, AutoSwitch.
As the question has come in, we will do this under our existing commercial, relationship with our providers. And of course, as Money Saving Expert, we have our communications channels. We have that trusted voice in the market to take such a proposition to market. So we're very excited about that space. Any guidance on that is included in the full year guidance at this stage.
Yes. So just now turning then back to the question on how do we get to the guidance number. We have included within the statements some sort of more detailed guidance on outlook, just in case anybody missed it on Page eight of the RNS. But as you've seen, we've confirmed that we're comfortable with market expectations and the confidence of meeting those for 2020. We have separately given some guidance that we still expect there continuing to be some pressure in gross margin from the mobile shift.
We've given some guidance in relation to what we expect from a cost base, so GBP 5,000,000 incremental marketing spend with other costs remaining well controlled. And I'm sure you all have your own view, therefore, as to how we get to that EBITDA number. But a couple of points to point out in terms of top line. Clearly, we've said that we're comfortable with where we started the year. We expect money to return to growth during the course of 2020.
And we also expect that the market switching conditions will be more favorable in 2020. We've previously talked about a return to premium inflation within car.
Two questions. One, just on price caps, given the growth that we're seeing in energy switching overall and your comments, I think my conclusion is price caps have been positive for switching. Is that your conclusion? Second question, on the brand marketing point, £5,000,000 incremental spend there, I'm still not quite clear exactly why you're doing that. Can you just give us some more color exactly what you're thinking there?
And is this the new sort of structural level of brand marketing going forward? Because we all we always felt previously there was a certain limit level and beyond that, there wasn't much point.
Yeah. Yeah. Maybe I'll take the price cap one. Maybe you touch on Brandon and maybe I'll I'll just add something to the end of it. Price caps, I I think we agree with your, conclusion.
So, you know, what have price ups done? They've absolutely put in a cap for more vulnerable users and that is a good thing, and we're pleased with that. In terms of how they've landed in the market, they haven't really changed, the dynamic that says that you as a user are much better off if you choose to switch your energy rather than sit on a standard variable rate. And that number, I think we said last year, is sort of bouncing around a little bit as the price goes up and down, but it has remained very healthy. So as I've said before, hundreds of pounds worth of savings to be had by switching in energy.
What the price caps have done, which is, the opposite of what we feared it might do, we feared it might lull people into a false sense of security. What it has actually done is introduced a trigger into the energy market, because it creates now an event in the year where you receive communication that says your bill is going or up or down or changing. And so that I think has been a stimulus in the market for, for switching for energy. But let's remember, it remains, and you saw it in sort of slide there, it remains a market with significant headroom. There are still millions of households that could save, hundreds of pounds on their energy.
We think that we have an opportunity to unlock, and we think also switching on Money Saving Expert and the monitoring services we have, will help drive that forward. Do want to talk about the brand marketing piece? Then I'll I'll just link it back to the statements I've made previously.
Yeah. So the the the 5,000,000 in sort of why now, if you like, is really because, through some of the initial results we've seen through, the Monitor customers, we're seeing some of that uplift in value. And so we feel it's the right time now to begin to drive, more people, if you like, into the brand awareness in the top of our funnel. Just to clarify, though, because we have had a couple of questions on it this morning, don't expect to see that £5,000,000 talking solely to, monitor propositions during the course of the year. It's £5,000,000 on our Money Supermarket brand through 2020.
So I just wanna link so that's absolutely right. Just wanna link it to the sort of previous statements that we've made where we said there's a sort of natural level of brand spend and what would, what the thing that would have forced us to not forced us, but to encourage us to reconsider that would if we had a propositional shift. So if you think of the phasing of what we have done, at the start of 2019, we did reposition the brand, and we moved it into Get Money Calm to create the halo for personalized services. We have then brought the personalized services into the core of the experience. And I guess today, are sharing some of the impact of that.
And that is creating the point for us to reflect and say, okay, we've now got the confidence to actually push a little bit harder on that brand proposition. So there is a connectivity to the statements that we've made previously. We have a question on the webcast.
We have a couple of questions from Hubert Juneau from UBS. Given higher servicing costs of policy monitoring, do you need cross sell to create value on those customers or is lower paid search enough? And also, could you please comment on market growth for credit card switching, I. E, is there an element of share loss alternative for competitors?
Slide 30, just a second. So that the economics of our personalized services, I'm just going to draw everyone back to slide 23 in, the deck. So there are multiple things that move and we've shared what we are finding, into this as clearly as we can, with the history that we have. And what we are finding is that actually you're seeing a number of things move around. So, yes, you do see a lower, paid traffic mix, but people are coming back more.
So we continue to see that. And yes, we do see an increase in our servicing costs. The key dynamic here though that is very encouraging, think, is the stuff on the left hand side, which says that these customers return with a greater frequency. That of itself is very positive. And the cross sell, the fact that, that is driving activity across multiple categories, we think is also very encouraging.
So do we expect these to move around as it scales and as we launch new services? Of course, we do. Do we hope to add more customers to our monitoring services? Of course we do, but we are very encouraged by what we are seeing in this analysis so far. Do you want to?
Sure. I'm not going to share, some of the market data in terms of the credit cards, side of the business. But I guess I'd point to, some things we've said before, where historically you know that we've particularly, played strongly within more of the prime elements on credit cards. And some of the competition that I think probably Ubert is alluding to has been, more in the near prime, subprime area. What we have looked to do though, you've seen, is further improve our eligibility journeys, which will help address, some of those nearer prime customers.
And clearly, you've seen, Credit Monitor, as our approach also to help support those customers to, you know, the points I was making to make sure that, you know, the product that they see is what they are are going to be able to get and encourage them along the way in terms of improving their credit scores so that they've got more choice in terms of credit cards once they've improved their scores.
Okay. Look. Any more on the web? No? Alright.
Let's and thank you very much. As I said, it's gonna be an exciting year. Trading's off to a good start. We're happy to confirm confidence and expectations. Thank you very much.